Marc Faber: Let me put it this way, of course it is a concern to me, if an asset class like gold and silver has been the best asset class over the last ten years, maybe copper was even better or a Warhol Painting and so forth. That concerns me. But I can turn around and say look, if I consider the price of gold, an average price in the mid 1980’s, say we take $400 or $450 or whatever it is, and we take the monetary base at that time, we take the international reserve. We take into consideration that China has not really in earnest begun to open up, and we happen to have the wealth expansion in emerging economies and so forth and so on. I can maintain, well actually the gold prices is not up, it is just a price of money or the value of money that has declined so much against the stable anchor. And so I do not think that we are in a bubble stage. But I mean I tell everyone, unless you buy gold it can easily go down 20% - 30%. This is not a prediction of mine, I am just telling people do not buy it on leverage, buy it as an insurance. If have health insurance, you also hope not to get sick, but just in case you get sick you have something. In the case of gold, as I said, my only concern with the gold insurance is the government will take it away. That is my only concern. I am not concerned about the price. - in FSN Click here to watch the full interview>>>>>>

Marc Faber : .....But I have to find out, I have one concern about gold, I was recently in Taiwan and South Korea at two large conferences. Nobody owns any gold. Gold is owned by a minority, even in the U.S. Most people in the U.S. have no clue what an ounce of gold is or looks like in the vault. The same in Europe. And in a democracy, it is very popular to take away from a minority. Like in Switzerland we now have a new state law that is being voted about in a few months that anyone who has assets of over $2,000,000, who dies and passes on these assets to his children, he will have an estate duty of 20%. Now most people in Switzerland, they do not have assets of $2,000,000 or $2,000,000 Swiss Francs, so they say yeah, good idea, we tax the rich. Then next year, I can come and introduce the referendum that says, everyone who has assets of say over $50,000,000 we tax him 50%. I know people who will say who has $50,000,000 dollars in assets, very few, the people will accept and vote for it. Now next year I can come back and have another referendum, everybody who has assets of over $900,000,000, we tax them 90%. And this is what the tyranny of the masses can do. You can make it appetizing to the masses, by just taking away from a few people. But I am worried most about, in the case of gold—not the price, that I am not worried—but I am about government taking it away.

Marc Faber : “I am convinced the whole derivatives market will cease to exit. Will become zero. And when it happens I don’t know: you can postpone the problems with monetary measures for a long time but you can’t solve them… Greece should have defaulted – it would have sent a message that not all derivatives are equal because it depends on the counter-party.” - in Reuters interview

You can debase currency, and history is replete with governments that have debased their own currency and ruined their own currency for hundreds of - well for thousands of years it has been going on. You can do that and everything is okay for a while, but eventually you have inflation, you have high interest rates, you have currency turmoil, you have people no longer trusting each other to invest with each other, and then you have the end of the system, and we have chaos, and it starts over again. - in BBC

Friday, December 16, 2011

“Bull markets climb a wall of worry. These sharp drops shake out the speculators and keep other would-be buyers on the sidelines. Once the weak longs are cleared out, the trip to 2,000 USD per ounce and beyond will resume unencumbered by excess baggage.” - in CNBC

Stocks, in my view, in most countries are like they were in the 1970s. In the 1970s stock markets, and economies around the world did not do very much and were in a big sideways trading range for many years. We are in that kind of period now. - in China Money Podcast

Tuesday, December 6, 2011

From World War II until very recently, the West - specifically Europe and the United States - was on a course for greater centralization, greater integration, and greater economic intervention. But this consensus is breaking down. In Europe, the euro has gone from steadily adding new members to now facing the prospect of having its weaker members quit. In America, the US Congressional Supercommittee has now officially failed in its mandate to bring even meager cuts to the bleeding US deficit.

This is the beginning of the end. Both the EU and US are politically paralyzed, seeming only to be able to make compromises that involve more spending, more debt, and more central planning. The results are all too predictable to free-market thinkers: bailouts leading to moral hazard, low interest rates leading to ballooning debt, and eventually a cascade of systemic failures - leading to more bailouts.

This was confirmed yet again last Wednesday when central bankers on both sides of the Atlantic announced a coordinated tidal wave of new money to bailout the Western banking system yet again. Now, the only money you can trust is the gold and silver in your pocket. -excerpt from The Great Western Crackup

Even if you own cash, the question is what kind of cash? If you owned Icelandic króna two or three years ago you might have thought you were sitting pretty. You would be holding cash and earning high interest at the same time. You would have gone bankrupt. - in Investment Week

Yes, there will be consolidations in the commodity bull market just as all markets have consolidations. In 1987, stocks declined 40-80 percent worldwide, but it was not the end of the secular bull market in stocks. - in CNBC